Canada Stocks on Track to Beat US for Longest Stretch Since 2022

There’s at least one area where Canada is more than holding its own as the trade spat with US President Donald Trump grows increasingly tense — the stock market.

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The mounting friction is taking a toll on both nations’ stocks. But the key Canadian equities gauge, the S&P/TSX Composite Index, is down less, by 1.4% to start 2025. Meanwhile, the S&P 500 Index, stung by steep losses in megacap tech stocks, has slumped 4.5%.

It’s still early, but if the current trend holds, it would be the third straight quarter for Canada’s market to outpace its US counterpart, something that hasn’t happened since the Federal Reserve was raising interest rates aggressively in 2022.

It’s perhaps a surprising development that Canada, which sends the majority of its exports to the US, is joining the list of global equity markets delivering better returns than the US this year. Canada’s benchmark has received a lift from shares of copper and gold miners, especially the latter as that asset is seen as a haven during times of turmoil. The US gauge, meanwhile, has suffered as growth worries are hurting earnings expectations for the tech behemoths that have powered much of its strength.

Trump’s tariff threats weigh more heavily on the US’s higher-growth, more-volatility equities than Canada’s,” Bloomberg Intelligence strategists Gillian Wolff and Gina Martin Adams wrote in a March 4 note.

Tariff Uncertainty

Given that Trump has long considered the stock market his report card, it’s telling that the shares of Canada’s biggest companies are doing better than those of the US. Six of the US’s so-called Magnificent Seven stocks are declining this year, while only three of the Canadian benchmark’s seven biggest stocks are down. Among the gainers: major banks and railways.

Of course, it remains to be seen how the trade war shapes up and what that means for various sectors. Mark Carney, who will become Canada’s next prime minister, has said he intends to keep the government’s retaliatory tariffs on US goods until “the Americans show us respect.” He has also made it clear that Canada will never be part of the US, dismissing Trump’s desire to make the country the 51st state.